Monty Munford2013-03-26 14:09:30 UTCPeople have dubbed it "Nairobbery" for a reason. Crime is still a crushing reality in Kenya's capital of Nairobi. Yet life in the city is changing for its 3 million inhabitants.
While the city is still dangerous for those who behave naively or who display conspicuous wealth by wearing expensive watches, crime rates are going down in Nairobi, and in the country as a whole.
According to the Kenya police, violent robbery has declined by 36%, burglary rates have decreased 25% and car theft went down 32% over the four-year period between 2006 and 2010, the latest figures available.
Moreover, the recent presidential elections earlier this month passed peacefully, a marked improvement over the disastrous 2008 elections, when 1,000 people died and the country nearly tipped into civil war.
Aside from an improved crime rate, technology is up. The extraordinary success of Kenya’s mobile payments system M-Pesa is the vanguard of an amazing story, and has helped position Nairobi as the tech hub for the continent.
The M-Pesa phenomenon has changed the banking system in Kenya. Launched in 2007 by the operator Safaricom, it registered more than 20,000 customers in its first month.
Less than six years later, more than 60% of the adult population has an account, and in June 2012 the total value of mobile money transactions was equivalent to more than 60% of Kenya’s GDP.
Before M-Pesa launched, the "traditional" banking system served only a quarter of Kenya’s adult population and the country had less than two bank branches per 100,000 people. Today M-Pesa has more than 40,000 agents nationwide, and more than 75% of the country’s financial transactions are handled by the system.
Many investors perceive Africa as the final frontier for high-return speculation, and the competition is fierce. So the success of M-Pesa has given Nairobi an extra edge over its African competitors.
Accra in Ghana, Lagos in Nigeria and the South African cities of Johannesburg and Cape Town are all vying to be Africa’s major tech hub, but with the Kenyan elections over and investors pacified, a flood of money is expected to flow into the country.
These investors are not alone. Google’s Eric Schmidt recently dubbed Kenya the continent’s technology leader after a trip to sub-Saharan Africa. And January’s launch of the the U.S. $10 billion Konza Technology City just outside Nairobi is further evidence of the city's promising future.
Then there is the city’s iHub, where Google’s Schmidt visited on his recent trip. Based in the center of Nairobi, the co-working space, tech community and business incubator provides a space for entrepreneurs to receive mentorship and possible VC funding. More importantly, it also hosts the fastest Internet connectivity in the country. It has been described as "the unofficial headquarters of Kenya’s tech movement."
It is also home to Ushahidi, which means "testimony" in Swahili. Ushahidi was a website initially developed to map reports of the 2008 electoral violence in Kenya. After Kenyan journalists used the site to collaborate during crisis, Ushahidi has since become an open source platform for content collection, visualization and interactive mapping.
Spanning more than 220 countries, the GSMA trade association has brought together 800 of the world’s mobile operators with more than 230 companies in the broader mobile ecosystem. GSMA will open an office in the iHub in 2013.
Chris Locke is the managing director of GSMA Mobile for Development. He is as passionate about Africa as he is enthusiastic about the opportunities that Nairobi offers.
“There are now twice as many mobile money users in Africa than there are Facebook users, and more transactions than on PayPal," says Locke. "What we’re seeing in countries such as Kenya is a phenomenal growth in innovation around mobile, where an entirely new industry is emerging.
“Startups in Nairobi are outpacing Silicon Valley, creating products that could only exist in a country that balances extreme needs with the possibilities products such as M-Pesa offers. Places such as iHub in Nairobi have become the crucible for this, not only for the country, but as an example for the whole continent,” he says.
But it’s not all about M-Pesa, as the success of Afroes shows. Afroes is the first African company to win a Meffy at the prestigious MEF awards in London. Not only is its mobile game Moraba popular across the continent; it recently launched a mobile iterative game before the Kenyan elections to promote peace among Kenyan youth.
London-based Matthew Dawes is the founder and CEO of event organizing company All Amber, which has held 12 trade shows on the continent, in South Africa, Nigeria and most recently at Mobile Web East Africa in Nairobi.
“Strategically, Kenya is definitely the most important mobile destination in sub-Saharan Africa," says Dawes.
“Strategically, Kenya is definitely the most important mobile destination in sub-Saharan Africa," says Dawes. “That doesn’t make it the most exciting market, though – Nigeria holds that badge. It’s in the top 10 mobile markets on the planet in numbers of subscribers, has a low penetration rate, is unpredictable in terms of success and the people are very business-oriented."
Some have branded Nairobi as "Silicon Savannah" in the same risible way that other world cities try to brand themselves after the Silicon Valley model. But many African companies at the Mobile Web Africa deride this term.
While speaking on a panel in the city, I suggested Nairobi didn’t need to brand itself this way — the whole conference burst into applause.
One of the attendees, TMS Ruge, co-founder of Uganda-based incubation hub Hive Colab, was similarly scathing about Silicon Savannah. “It is misleading. We don’t have the right to call ourselves Silicon Savannah," he says. "We don’t produce silicon; we don’t make anything; we are emulators at best. And in a few ways we are innovators with products such as M-Pesa and Ushahidi. We need to go beyond hyping it with a cute name."
Whether Nairobi decides to brand itself as Silicon or Digital Savannah means little when it comes to its tech future. More importantly, now that the election has passed without violence, it will be investors, both foreign and African, that will decide its future.
Image courtesy of Flickr, Dan Kori
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